Profit taking supported by the barrel of oil on Tuesday…
(Boursier.com) — Profit-taking supported by the barrel of oil on Tuesday. The barrel of American light crude WTI (May futures) is currently losing 4.5% to $103.3 on the Nymex, while the Brent North Sea fell 4.3% to $108.3 for the June contract. After four consecutive days of gains, prices are consolidating, particularly affected by the latest statements by the President of the Federal Reserve of St. Louis, James Bullard, who said on Monday that the Fed should not rule out rate hikes of 75 points. base to deal with galloping inflation.
On ‘CNBC’, the leader said a benchmark rate of 3.5% was the minimum the Fed needed and that it should try to achieve it by the end of the year. For the time being, the markets are expecting rate hikes of 50 basis points at the Fed’s next monetary meetings. The CME’s FedWatch tool shows a nearly 91% chance of a 50bp hike in May, then a roughly 94% chance of a further 50 or 75bp tightening in June.
The latest forecasts from the International Monetary Fund (IMF) are also worrying. The IMF sharply cut its forecast for global growth due to the direct impact and fallout from the war in Ukraine, and it warned that inflation now posed “a clear and very present danger” for many countries. New sanctions targeting the Russian energy sector, a widening of the armed conflict, a more marked deceleration than anticipated in China or a resurgence of the pandemic could accentuate the global slowdown while amplifying inflation, underlined the organization. The IMF now expects global growth of 3.6% in 2022 as in 2023, 0.8 points less than forecast in January for this year and 0.2 points less for next year, due to the direct impact of the war on the economies of Ukraine and Russia, and its spillover effects on the rest of the world.
In addition, while EU officials are working on a plan to gradually reduce oil imports from Russia in order to give member countries time to find alternative suppliers, more detailed discussions on this oil embargo will be held after the second round of the French presidential election scheduled for April 24, could we read in the ‘New York Times’ on Thursday. Finance Minister Bruno Le Maire said this morning that it was “more than ever” necessary to stop oil imports from Russia. France hopes to convince its European partners “in the weeks to come”, declared the minister on ‘Europe 1’.
In this environment, production issues in Libya provide limited market support. Libyan oil production has fallen to around 800,000 barrels per day. The Sharara field in the west of the country, which can pump 300,000 barrels a day, has been closed as social unrest and political unrest continue. The National Oil Corp (NOC) warned on Monday of “a painful wave of shutdowns” and declared force majeure on some facilities.